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Asia’s New Growth Model

MILAN – Led by Asia, the share of the global economy held by emerging markets has risen steadily over recent decades. For the countries of Asia – especially its rising giants, China and India – sustainable growth is no longer part of a global challenge. Instead, it has become a national growth-strategy issue. This marks a sea change in the global structure of incentives with respect to achieving sustainability.

Over the next few decades, almost all of the world’s growth in energy consumption, urbanization, automobile usage, airline travel, and carbon emissions will come from emerging economies. By mid-century, the number of people living in what will be (by then) high-income economies will rise to 4.5 billion, from one billion today. Global GDP, which currently stands at about $60 trillion, will at least triple in the next 30 years.

If emerging economies try to reach advanced-country income levels by following roughly the same pattern as their predecessors, the impact on natural resources and the environment would be enormous, risky, and probably disastrous. One or several tipping points would most likely bring the process to a screeching halt. Energy security and cost, water and air quality, climate, ecosystems on land and in the oceans, food security, and much more would be threatened.

At present, almost any standard measure of the concentration of global economic power would show a declining trend. If that were to continue, the result would be a world in which each country’s contribution to pressure on natural resources and the environment would make sustainability a major global challenge, as the free-rider problem in its most extreme form would prevail. To change course, global agreements that impinge on growth would be needed, along with systems that ensure compliance.